Latin American Panel November 1, 2011 TANKER MARKET OVERVIEW JOSEPH ANGELO MANAGING DIRECTOR.
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Latin American Panel November 1, 2011 TANKER MARKET TANKER MARKET OVERVIEW OVERVIEW JOSEPH ANGELO MANAGING DIRECTOR
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Transcript of Latin American Panel November 1, 2011 TANKER MARKET OVERVIEW JOSEPH ANGELO MANAGING DIRECTOR.
Latin American Panel
November 1, 2011
TANKER MARKET TANKER MARKET OVERVIEW OVERVIEW
JOSEPH ANGELOMANAGING DIRECTOR
• Weak market, uncertain/weak fundamentals
• Oversupply of tankers
– slow steaming (ballast)– Lowering of C/P speed– Suez Canal less used– Piracy effect – longer routes/inefficiency – Waiting
• Increased Middle East export has not helped freight rates
The state of the Tanker Industry
Tanker MarketWorld GDP and oil demand change
Source. IMF/BP/IEA/Fearnleys
%
Oil/tanker demand correlates with Economic growthIMF forecast positive growth projected – but there is great uncertainty
Because the extra barrel is taken from the Middle east, tonne-miles growth is stronger
Recent Tanker Rates
Source: Baltic: Exchange/BITR
$/day
Rates improved by slow steaming/backhauls
Tanker MarketOil price and freight rates 1970-2011
$ per barrel
0
20
40
60
80
100
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Nominal price Arab Light
Real price Arab Light
Nominal freight rate AG-West
Real freight rate AG-West
Deflated by the Consumer Price Index (USD)CPI* index 1982-84=100
Tanker MarketVLCC newbuilding prices and break even rates
m $ $/day
Tanker Demand
Middle East oil production
mbd
Year
Tanker DemandIncrease in world oil demand
Based on data from IEABased on data from IEA
mbd
Tanker DemandSeaborne Oil Trade and Middle East Oil production
Based on Fearnleys/IEABased on Fearnleys/IEA
mbd 000 bn tonne-miles
Tanker DemandCrude oil seaborne trade
38 mbd in 201038 mbd in 2010
3057 bn tonne miles in 20103057 bn tonne miles in 2010
Others48%
Other Persian Gulf25%
North Africa12%
Saudi Arabia15%
Saudi Arabia18% North Africa
5%
Other Persian Gulf27%
Others50%
Tanker DemandOil balance: production - consumption
Source: INTERTANKO / IEASource: INTERTANKO / IEA
mbd
Tanker DemandMiddle East Oil production Jan-2000 to Aug-2011
Based on Fearnleys/IEABased on Fearnleys/IEA
mbdPrimo Oct. 2011negative VLCC
Rates
Tanker DemandTrade movements
Based on BPBased on BP
mbd
0
10,000
20,000
30,000
40,000
50,000
60,000
19
80
19
81
19
82
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
US Europe Japan Rest of World
Rest of world 26%
Rest of world 47%
Tanker Supply
Tanker SupplyTanker fleet development
Tanker fleet increase 2003-2013 some 72%
m dwt number
Assumed orderbook August 2011, include chemical tankers
Tanker SupplyTanker phase out, deliveries, scrapping tankers 10,000 dwt
+ balance assuming various demand increasesm dwtm dwt
Under above assumptions, 6% growth necessary to regain market balance by 2014 or more removal of DH tankers
Tanker SupplyNewbuilding Orders (Clarkson)
2002 2003 2004 2005 2006 2007 2007 2009 2010 Oct-11
VLCCs 4.6 15.0 12.3 10.1 34.7 11.4 34.0 6.1 15.8 1.6
Suezmaxes 2.3 7.9 4.5 1.1 12.2 9.4 8.0 4.4 9.5 2.4
Aframaxes 5.2 10.6 7.2 6.0 18.4 8.8 3.7 2.0 4.0 0.8
Panamaxes 3.0 5.7 4.1 2.3 4.1 3.8 1.3 1.0 1.3 0.2
Handy 3.3 6.6 4.7 6.1 11.2 4.9 3.5 1.4 1.6 1.7
Chemicals/speci.
2.1 3.0 4.5 4.3 8.0 9.3 2.4 0.2 0.1 0.2
Total 20.5 48.8 37.3 29.2 88.6 47.6 52.9 15.1 32.3 6.9
Average age tanker fleet above 10,000 dwt
Based on LRFairplayBased on LRFairplay
Years
6
8
10
12
14
16
19
70
19
72
19
74
19
76
19
78
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
Tanker Values
VLCC value - 15 years old and scrap value
Source: Clarkson/SIW
m $
Conclusion
ConclusionsOil demand, tonne-mile, and tanker fleet indices
Source: IEA, Fearnleys, INTERTANKO
Tanker fleet increase 2002-2010: 46%
95
100
105
110
115
120
125
130
135
140
145
150
155
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
Oil demand index
Tonne miles crude tanker index
Tanker fleet index
Conclusions Slowing Growth, Rising Risks
• Fundamentals uncertain or weak
• Recovery in the US and Europe and debt problems are aggravating situation
• Chinese growth is threatened partly by weakening world economy but also by a domestic debt burdened industry
• Oil demand growth still positive, but weakening
• Surplus of tankers will continue to increase
ConclusionsStrategic tanker consideration
• China and Asia expected to drive demand and the Middle East has the reserves
• Successful Green House Gas reduction will mean reduced oil consumption
• High oil prices dampen growth in world economy and a stimuli to fuel saving
• Substantial opportunities for both owners and charterers with regard to vessel speed
• Costs reduction needs carful risk management
Thank You
For more information, please visit
www.intertanko.com
